Amid revenue loss due to gas flaring, the federal government has proposed a 50 percent tax increase on guilty oil companies.
This was contained in the Finance Bill of 2022 that was submitted to the National Assembly by President Muhammadu Buhari on Wednesday.
Gas flaring is the term for burning off the gas which comes out of the ground while drilling for oil. The flares are the giant flames often seen coming out of smokestacks on oil installations.
Recall that Investors King earlier reported that Nigeria loses N264.427 billion to gas flare in 10 months. This is despite the dwelling revenue of the country and the increasing budget deficit.
Data from the National Oil Spill Detection and Response Agency (NOSDRA) indicated that companies operating in the country’s petroleum industry flared 170.5 billion standard cubic feet (BSCF) of gas in 10 months, between January and October 2022.
Apart from revenue loss, the process known as “gas flaring” has been condemned as a danger to the environment and human health, as well as a waste of fuel.
Experts believed that gas flaring produced a chemical called benzene into the air, which can give people who live nearby headaches, tremors and irregular heartbeats. Benzene can also cause cancer.
Additionally, the volume of gas flared in the ten months was equivalent to carbon dioxide emission of 9.1 million tonnes; and had a power generation potential of 17,100 gigawatts hour (GWh). Data from NOSDRA revealed.
Speaking on Thursday during a public hearing on the bill at the National Assembly, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the proposed higher tax was to disincentive gas flaring so Nigeria could meet its climate change goals.
While commenting on the finance bill, the Chairman of the Senate Committee on Finance, Senator Solomon Adeola, explained that the amendments were not only for generating increased revenue for the government but also providing clarity, removing ambiguities, providing succour for deserving persons and sectors as well as bringing the country’s laws up to speed with global best practices.
